One Foot In Each Camp

Written by Elena Fawkner

One Foot In Each Camp

© 2002 Elena Fawkner

You have a full-time job but secretly you yearn to break free ofrepparttar corporate shackles and strike out on your own. You have a great idea for a business but you needrepparttar 117507 income from your job to pay your mortgage and to feed yourself while you get it underway. Sound familiar? This article considers this dilemma and suggests how you might makerepparttar 117508 break from paid workforce to your own full-time home business when financial necessity dictates a regular and uninterrupted monthly income.

This may be obvious but it bears restating: if you need a regular paycheck to survive, DON'T give up your day job until you have another regular, consistent income stream to take its place. This applies even if you are absolutely convinced that your business idea is a surefire formula for financial success. It may be, but evenrepparttar 117509 most successful businesses take time to get ofrepparttar 117510 ground and most have a few false starts before they finally take off.

If you can't afford to give up your paid income while you build your business, then you have no choice but to start your home business as a side project and run it alongside your job. To make any sort of progress in your home business, plan to devote two to three hours a day at an absolute minimum to your business.

Because your time is extremely limited, you need to be ruthlessly efficient with what you do with it. For example, can you find spare pockets of time during your workday? If you are running an internet-based business and use a computer as part of your day job, this MAY be a possibility but be careful here. Don't risk your job for your business if you can't afford to lose that income. I'm not suggesting here for a second that you conduct your business on company time, at least when you have work to do. If you have some downtime during your day, though, then do look for ways to use that time productively.

Other ways to squeeze time out of your day include foregoing TV inrepparttar 117511 evening and/or getting up an hour earlier. In other words, get your priorities straight.

If your home business is related to your paid job, be extremely careful not to create a conflict of interest for yourself. In particular, do NOT deal with your employer's clients as part of your business. Not only is it unethical but, whenrepparttar 117512 time comes and you makerepparttar 117513 break from workforce to full-time home business, those clients may well follow you and your employer would have every right to take legal action against you for breach of your employment contract.

Another difficulty you can get yourself into in this area is where to drawrepparttar 117514 line, if challenged, between what is confidential information and what is just general knowledge you carry around in your head. You cannot use confidential information you obtained inrepparttar 117515 course of your job in your business. Your general knowledge is not considered confidential information. Examples of confidential information include customer lists, knowledge ofrepparttar 117516 systems and procedures of your employer's business, trade secrets and repparttar 117517 like. For these sorts of reasons, it really is advisable not to choose for your home business what you do in your job.

It is a good idea to be discreet inrepparttar 117518 workplace about your extracurricular activities. Don't go out of your way to advertiserepparttar 117519 fact that you have started your own business. At best you will expose yourself torepparttar 117520 increased scrutiny of your boss who may be concerned you will conduct your business on company time. At worst, you may jeopardize your chances for advancement if your outside activities convey repparttar 117521 message that you are only a temporary fixture who will leave as soon as your business starts generating enough income for you. Although you may not be particularly concerned about career advancement because you plan to leave to run your own business, at least consider your position if your home business dreams don't pan outrepparttar 117522 way you hope. It is very difficult to resurrect an ambitious image once you've let it slide.

Finally, and especially during this 'double duty' period be sure to allow sufficient time each week for relaxation and taking care of yourself. This means paying attention to your nutrition, exercise routine and getting adequate sleep and well as allowing for pure downtime. The demands on your body duringrepparttar 117523 double duty period can be pretty intense.

You don't want to be taking on this challenge if you're rundown, unfit and aren't getting enough sleep. All areas of your life will only suffer if you're in this state. So, stay ahead ofrepparttar 117524 game by eating right, exercising and getting plenty of sleep and relaxation.

Pricing Yourself to Get and Stay In Business

Written by Elena Fawkner

Pricing Yourself to Get and Stay In Business

© 2002 Elena Fawkner

It goes without saying thatrepparttar bottom line of any successful business is profit. Don’t make a profit and you won’t be in business for very long.

Making a profit is pretty simple really.

You just have to make more than you spend. The trick is to know how much you have to make to exceed what you spend.

And you spend more than money when running a business. You spend something infinitely more valuable. Time. And, as we all know, time is money.

To maximize profits, accurate pricing is absolutely critical. Your prices must be high enough to cover costs and enable you to earn a reasonable return but low enough to remain attractive to prospective clients.

New entrepreneurs often have difficulty accurately pricing repparttar 117506 value of their time and expertise. Some takerepparttar 117507 approach that they can work cheaply because they're fast and they’re prepared to take any work, now matter how low-paying, to fill inrepparttar 117508 time between more lucrative assignments.

For this group,repparttar 117509 mindset appears to be that any work is better than no work. Although this may seem reasonable when you're first starting out and you just want to make your mark as early as possible,repparttar 117510 downside is that this short- sighted approach can create in customers a “cheap” mindset that is difficult to shift oncerepparttar 117511 business becomes established.

Another group of entrepreneurs, though, takesrepparttar 117512 approach fromrepparttar 117513 outset that they are worth top dollar and demand fair pricing forrepparttar 117514 value they provide and won’t accept anything less. This group appears to be more successful thanrepparttar 117515 former inrepparttar 117516 longer run. Sure, they may find it slow to start with. After all, they are new in town, they can't rely on repeat business and they can't riderepparttar 117517 wave of their own impressive reputations. But by settingrepparttar 117518 bar high to start with, when their businesses DO become established, they've setrepparttar 117519 tone and their businesses usually have a firmer foundation for it.

This article looks atrepparttar 117520 fundamentals of pricing forrepparttar 117521 new home-based business entrepreneur.


Here are some basic principles to keep in mind when considering your pricing strategies:

=> Prices must at least cover costs.

If you don't at least cover costs, and this includes an amount for your time, you will incur a loss. If your business is incurring a loss it's a hobby.

=> The best way to lower price is to lower costs

As price equals costs plus profit margin, it's obviously better to reducerepparttar 117522 cost element thanrepparttar 117523 profit element if, for any reason, you find that you must reduce your prices.

=> Prices must reflectrepparttar 117524 environment in which they operate

Any price, whether yours or your competitors', necessarily reflectsrepparttar 117525 dynamics of cost, demand, market changes, competition, product utility, product longevity, maintenance and end use.

=> Prices must be withinrepparttar 117526 range of what customers are prepared to pay

It's all very well havingrepparttar 117527 best bread slicer inrepparttar 117528 western world but if your price is more than customers are prepared to pay for it, so what? Onrepparttar 117529 other hand, there is absolutely no reason to charge less than customers are prepared to pay either.

=> Prices should be set at levels that will shift products and services and not to beat competitors alone

It's easy when you start delving into all ofrepparttar 117530 sophisticated analysis and research around about optimum pricing levels to forget that, atrepparttar 117531 end ofrepparttar 117532 day, you set your prices as high as you can while still shifting your products and services. So don't think that keeping pace with competitors is enough. It isn't. You may have competitive advantages that mean you can charge more than your competitor.

=> The price you set should represent a fair return for your time, talent, risk and investment

Don't be coy about demanding a reward for what you bring torepparttar 117533 table. Your expertise and talent has objective worth. Don't just give it away. Charge for it.


The basic price you will strike is simply your costs plus a profit margin. It follows that before you can set your prices you must know exactly what your costs are. Costs fall into three main areas:

=> Direct Costs

Direct costs are those things directly related torepparttar 117534 creation of your product such as raw materials, parts and supplies.

=> Overheads

Overheads are business costs not directly related to production and include things such as taxes, rent, office supplies and equipment, business related travel, insurance, permits, repair of equipment, utilities (electricity and telephone) and professional advice (accountant, lawyer).

=> Labor

Labor costs include all wages paid to employees *including yourself*. It's amazing how many home-business owners forget to include their time as a cost of business!

Calculate your labor costs by multiplyingrepparttar 117535 number of hours worked by an hourly wage. You should also include fringe benefits (typically 15% plus).

Once you have ascertained your total costs, add a profit margin. A 15-20% profit margin is standard for most home-based businesses. Although you have included your own wages in your labor costs, if you don’t add a profit margin there will be no money for growth or expansion ofrepparttar 117536 business.

Cont'd on page 2 ==> © 2005
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